Of late, the most crucial factors affecting gold prices are the US dollar and the potential change in the US interest rate. Precious metals are highly sensitive to movements in Treasury rates, as gold and Treasuries are competitors as haven assets. As investors await the Federal Reserve’s meeting in a few days, there’s a high chance that the interest rate will rise.

Are Upcoming Interest Rate Hikes Already Priced into Gold? Mining stocks are known to have a strong correlation with gold, as gold is the most crucial of all the four precious metals. For our correlation analysis, we’ll look at Randgold Resources (GOLD), Yamana Gold (AUY), Coeur Mining (CDE), and Barrick Gold (ABX). Mining-based funds also have a high correlation with precious metals.

Can Yamana Gold Maintain Its Price Strength in 2018? Yamana Gold (AUY) had a net debt of $1.7 billion at the end of 2017 compared to $1.5 billion at the end of 2016. At the end of 2017, Yamana had $970 million in financial resources, which includes cash and cash equivalents and undrawn revolving credit facility.

Can Yamana Gold Maintain Its Price Strength in 2018? All its mines except Canadian Malartic and Cerro Moro use the gold price assumption of $1,250 per ounce. The Canadian Malartic mine uses an assumption of $1,200 per ounce, and Cerro Moro uses an assumption of $950 per ounce.

Historically, IAMGOLD (IAG) has traded at a lower valuation than its peers. However, after its significant turnaround in 2017 and year-to-date, its discount versus peers has fallen. Its discount for the last five years versus its intermediate peers (GDXJ), on average, was ~40%, which has shrunk to 15% currently. IAG stock is now trading at a forward multiple of 5.3x.

Mining stocks tend to take their cues from gold price movement. Mining-based funds have a high correlation with precious metals. The VanEck Vectors Gold Miners ETF (GDX) and the Sprott Gold Miners (SGDM) rose 1.1% and 0.52%, respectively, on Friday, February 23.

Palladium was the only precious metal to rise with a gain of 0.74% for the day. Gold and silver were at $1,328 and $16.5 an ounce, respectively. The loss in precious metals over the past week was likely due to the rebound in the US dollar.

Newmont Mining’s (NEM) all-in sustaining costs (or AISC) came in at $968 per ounce in 4Q17, which is 5.4% higher year-over-year (or YoY) and 2.7% sequentially. The increase in unit costs is mainly due to higher mill maintenance costs at Boddington and higher sustaining capital expenditure. Its full-year AISC came in at $924 per ounce, which is 1% higher than 2016.